This podcast features Dalton and Michael discussing "founder mode" following Brian Chesky's talk at a YC alumni event for late-stage founders. They explore what happens when companies scale, how founders can lose touch with their companies, and strategies to stay connected despite layers of management.

"You got to figure out your technique for cutting through the bureaucracy you've built to figure out what's going on."

The concept emerged from a special YC event specifically for growth-stage and late-stage founders - not early-stage startups, but established companies making tens or hundreds of millions in revenue with significant employee counts.

Brian Chesky of Airbnb was invited to give a talk tailored specifically for these later-stage company founders, drawing from his experience running Airbnb as it scaled.

"We did a special event just for growth stage late stage YC Founders... picture a room couple hundred people... all the founders of late stage growth stage YC companies, companies making tens of millions or hundreds of millions."

When companies scale and founders hire executives and layers of management, they often lose direct connection to what's happening in their company. Once past Dunbar's number, founders no longer have direct contact with people talking to customers, writing code, or creating designs.

"When you're a late stage founder and you have to hire Executives and then layers of management, it's hard to have a feeling for what's happening in your company... there are a lot of people who are slowly starting to feel like they're operating a marionette."

This disconnect makes founders feel separated from their company's operations - unable to understand what's actually happening on the ground level. This problem is particularly common among later-stage founders.

For growing companies, conventional wisdom from investors and boards typically pushes founders to:

• Build out large management teams
• Delegate extensively
• Hire external experts who supposedly "know better"
• Stay out of the details

"If you're a later stage founder I experienced this at my startup and I know you did too - it is very typical for your investors and your board to say 'hey you need a big management team, you need to delegate, and you need to hire all these experts and they know better than you and so you need to stay out of the details.'"

The hosts emphasize that this advice doesn't apply to early-stage startups - it's specifically about the challenges of running scaled companies with many employees. The key point from Chesky and Paul Graham is challenging this conventional wisdom about how to operate growth-stage startups.

A concrete example of the issue is having too many layers of management relative to company size. The hosts reference Amazon's planned reorganization to reduce management layers between entry-level employees and the CEO.

"How many layers of management there is relative to how large your company is... they're just trying to look at how many layers of management between the entry level folks and the CEO and just try to move several layers."

In large organizations (2,000+ people), even basic questions become difficult to answer:

"You would be shocked at the questions that a startup can answer about its users and its products that a large company the answers are tricky... I've heard of companies hiring consulting firms because 'we don't really know how to answer the question who are our users.'"

As companies grow to thousands of employees, bureaucracy inevitably develops. This isn't just a government problem but an organizational one that affects all large structures.

"Bureaucracy isn't a government problem, it is a organizational problem."

The hosts describe how bureaucracy manifests:

• Too many people needing to weigh in on decisions
• Multiple approval layers required
• Additional red tape created because of one-off bad experiences in the past

"There's now all this red tape cuz this one thing happened 10 years ago...this can never happen again... they just pile up."

This bureaucratic bloat pushes important activities (talking to users, understanding customer complaints, using your own product) down the priority list. Founders often mistakenly trust others to handle customer service while they manage the bureaucracy - a fundamentally flawed approach.

The hosts share a story about Parker from Rippling who addresses problems that reach his desk by bringing together every layer of management down to the individual contributor to solve issues together. This demonstrates how founders can cut through bureaucracy to understand what's really happening.

"If a problem is sneaking all the way up the chain to get to me, sending some message all the way down and expecting the person at the bottom to hear it - that's never going to happen."

Brian Chesky at Airbnb had experienced being "disinvited from his own meetings" because he was seen as "causing problems" - showing how bureaucracy can try to exclude even the founder.

"The bureaucracy was so big that it was trying to keep me out of it and it was my own company."

Great executives understand the founder's power and authority, seeking ways to leverage the founder to accomplish goals. In contrast, poor executives try to isolate founders or "protect" them from what's happening.

"When you hire great managers and great Executives they understand the power and the authority of a founder and they often are trying to figure out how to use the founder to accomplish some goal versus trying to build some fiefdom or trying to protect the founder from what's really going on."

The hosts acknowledge the difficulty of hiring truly excellent executives, especially for startups competing against large companies with significant compensation packages. Even at $100M in revenue, startups struggle to attract top executive talent.

The hosts note that some commentary mistakenly reframed the founder mode conversation as being about "investors versus founders" rather than the actual topic of "executives/management versus founders."

"I think one of the threads that this took which I found weird was changing it from a conversation about Executives and management versus founder CEO to a conversation about Investors versus a Founder CEO."

They clarify that investors dictating how to run a company is a separate problem entirely from the founder mode discussion.

As founder mode became a viral concept, it turned into a "Rorschach test" where everyone projected their own biases and experiences onto it.

"Any idea that goes viral and gets popular becomes a sort of like Rorschach test where everyone sees in it their own thing."

The hosts observed that reactions to the founder mode essay revealed more about the commenters than about the concept itself. Once sufficiently viral, the idea became decontextualized from Chesky's original message and setting.

"When something gets sufficiently viral it gets decontextualized from the person that said it and what the context was and just turns into basically a flame war."

The hosts emphasize that Chesky's message was fundamentally about taking responsibility - not blaming others.

"The key thing is he was saying this was my fault he wasn't passing the buck. The point of the story is I made a mistake, learn from me, don't do what I did. It wasn't to blame people working at Airbnb. Only one person messed up and he was owning it."

The encouraging message is that no matter how large a company grows or how extensive its bureaucracy becomes, founders can reclaim control and start actively running their companies again.

• YC Alumni Event for Late-Stage Founders: Special gathering where Brian Chesky gave his founder mode talk
• Brian Chesky: Airbnb CEO who shared his experiences running a late-stage company
• Paul Graham (PG): Referenced for his blog post on founder mode
• Dunbar's Number: Referenced as the point where founders can no longer maintain relationships with everyone in their company
• Parker from Rippling: Mentioned for his technique of addressing problems by bringing together all management layers
• McKinsey: Referenced as example of consulting firms hired by large companies to answer basic questions about their users

• Founder Mode is about late-stage founders staying connected to their companies despite growth and bureaucracy
• NOT relevant for early-stage startups but crucial for companies with hundreds/thousands of employees
• Key challenge: As companies scale, founders lose direct connection to customers, code, and design
• Common advice from boards and investors to delegate everything and stay out of details is being challenged
• Bureaucracy inevitably develops in large organizations, creating approval layers and red tape
• Great executives leverage a founder's authority; poor ones isolate founders from operations
• Techniques exist to cut through bureaucracy, like directly connecting with individual contributors
• Brian Chesky's message: Taking personal responsibility for losing touch, not blaming others
• Encouraging takeaway: Even at massive scale, founders can reclaim control of their companies